Are automobile buyers entitled to a cooling-off period?

On Behalf of | Dec 23, 2021 | Auto Dealership Law |

Automobile dealers in California know that there is a lot of pressure in the sales business. Sales are integral to the success of a business and keeping up with the laws and regulations governing major purchases, such as an automobile, can be complex.

Most business owners and salespeople are probably familiar with a “cooling-off” period. This is a period after a sale is finalized in which the buyer has the option to cancel or rescind the sale if they change their mind about the purchase.

However, when it comes to automobile sales, there is no cooling-off period under California law. This means that once an automobile is sold, the buyer cannot come back and attempt to return the vehicle because they no longer want it or decided it was too expensive.

To ensure automobile buyers are aware of this, automobile dealers are required to place a sign stating there is no cooling-off period in every area where sales contracts are regularly discussed or executed. This typically means a sign must be posted in each sales office or every salesperson’s area. Each sign must be 8 inches high and 10 inches wide.

The purpose of these requirements is to make sure that buyers know the exact terms of their purchase and cannot later return saying they thought they could cancel the sale within a certain period of time.

The only minor exception to this rule applies to used automobile purchases with a purchase price less than $40,000. In these cases, an option to cancel the contract for a period of 2 days is required under California law.

Can a vehicle sale ever be cancelled?

Yes, in certain situations, an automobile sale can be cancelled. The most common scenario involves a claim of fraud by the purchaser. If the fraud is proven, the sale could be ordered rescinded. Otherwise, an automobile sale can only be cancelled upon the agreement of both the buyer and the seller. Any agreement to cancel should be in writing.

Understanding when and under what conditions an automobile purchaser can cancel a contract is essential for automobile dealers. If a purchaser attempts to cancel, help and guidance is always available.

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